However, the CMA has decided to refer the merger to a second assessment phase, which will take six months to examine the plans.

It comes after the authority said it had "found that the merger could result in adverse effects for patients by reducing choice and competition across a range of elective specialties".

Nick Moberly, chief executive at the Royal Surrey, said: “We’re obviously disappointed with this decision as we believe a merger would result in a number of positive benefits for patients."

Management boards at both hospitals were set to discuss the latest turn of events at meetings next week.

Ashford and St Peter's chief executive, Suzanne Rankin, added: "Although this was not the decision we were hoping for, we understand that the CMA needs to carry out a more in-depth analysis of our plans to ensure this is in the best interests of patients.

"Unfortunately this means we will need to wait longer until a final decision is reached.”

'Incentive'

The trusts hope the merger will save an estimated £10m-£20m and have said patients will not notice any changes in services in at the three hospital sites.

Results showed 72% of consultant staff at the Royal Surrey did not believe care for patients would be improved in the proposed partnership, while 74% said they did not think the merger would benefit their department.

Andrea Coscelli, executive director for markets and mergers at the CMA, said: “Our job is to look at the evidence and examine the impact that a proposed merger could have on patient choice and the quality of healthcare services provided.

"Tens of thousands of patients a year are treated by the trusts in the specialties we've looked at and could be potentially affected by the loss of choice they currently have.

"If the trusts no longer have to attract patients who might choose to go elsewhere, it could mean their incentive to maintain and improve quality in those specialties is reduced.

"We acknowledge that there may be some benefits which result from the merger but given the extent of our concerns and the number of specialties and patients involved, we feel it is necessary to look at this merger in greater depth to ensure that it is in patients’ interests."